Tell Us More

Share a bit more information with us
to finalize your Free Quote request.

You are looking for information regarding:

2 to 10+ carat
Round Diamond
Country
United States Afghanistan Aland Islands Albania Algeria American Samoa Andorra Angola Anguilla Antarctica Antigua and Barbuda Argentina Armenia Aruba Australia Austria Azerbaijan Bahamas Bahrain Bangladesh Barbados Belarus Belgium Belize Benin Bermuda Bhutan Bolivia, Plurinational State of Bonaire, Sint Eustatius and Saba Bosnia and Herzegovina Botswana Bouvet Island Brazil British Indian Ocean Territory Brunei Darussalam Bulgaria Burkina Faso Burundi Cambodia Cameroon Canada Cape Verde Cayman Islands Central African Republic Chad Chile China Chinese Taipei Christmas Island Cocos (Keeling) Islands Colombia Comoros Congo Congo, the Democratic Republic of the Cook Islands Costa Rica Cote d'Ivoire Croatia Cuba Curaçao Cyprus Czech Republic Denmark Djibouti Dominica Dominican Republic East Timor Ecuador Egypt El Salvador Equatorial Guinea Eritrea Estonia Ethiopia Falkland Islands (Malvinas) Faroe Islands Fiji Finland France French Guiana French Polynesia French Southern Territories Gabon Gambia Georgia Germany Ghana Gibraltar Greece Greenland Grenada Guadeloupe Guam Guatemala Guernsey Guinea Guinea-Bissau Guyana Haiti Heard Island and McDonald Islands Holy See (Vatican City State) Honduras Hong Kong Hungary Iceland India Indonesia Iran Iran, Islamic Republic of Iraq Ireland Isle of Man Israel Italy Jamaica Japan Jersey Jordan Kazakhstan Kenya Kiribati Korea Korea, Democratic People's Republic of Korea, Republic of Korea (South) Kuwait Kyrgyzstan Lao People's Democratic Republic Laos Latvia Lebanon Lesotho Liberia Libyan Arab Jamahiriya Liechtenstein Lithuania Luxembourg Macao Macedonia, the former Yugoslav Republic of Madagascar Malawi Malaysia Maldives Mali Malta Marshall Islands Martinique Mauritania Mauritius Mayotte Mexico Moldova, Republic of Monaco Mongolia Montenegro Montserrat Morocco Mozambique Myanmar Namibia Nauru Nepal Netherlands Netherlands Antilles New Caledonia New Zealand Nicaragua Niger Nigeria Niue Norfolk Island Northern Mariana Islands Norway Oman Pakistan Palestinian Territory, Occupied Panama Papua New Guinea Paraguay Peru Philippines Pitcairn Poland Portugal Puerto Rico Qatar Republic of China Reunion Romania Russian Federation Rwanda Saint Barthélemy Saint Helena, Ascension and Tristan da Cunha Saint Kitts and Nevis Saint Lucia Saint Martin (French part) Saint Pierre and Miquelon Saint Vincent and the Grenadines Samoa San Marino Sao Tome and Principe Saudi Arabia Senegal Serbia Serbia and Montenegro Seychelles Sierra Leone Singapore Sint Maarten (Dutch part) Slovakia Slovenia Solomon Islands Somalia South Africa South Georgia and the South Sandwich Islands South Sudan Spain Sri Lanka Sudan Suriname Svalbard and Jan Mayen Swaziland Sweden Switzerland Syrian Arab Republic Taiwan Tajikistan Tanzania, United Republic of Thailand Timor-Leste Togo Tokelau Tonga Trinidad and Tobago Tunisia Turkey Turkmenistan Turks and Caicos Islands Tuvalu Uganda Ukraine United Arab Emirates United Kingdom United States Minor Outlying Islands Uruguay Uzbekistan Vanuatu Venezuela, Bolivarian Republic of Vietnam Virgin Islands, British Wallis and Futuna Western Sahara Yemen Zambia Zimbabwe

October 2007

Diamonds are Not a True Commodity

There has been a lot of press about Martin Rapaport’s plan to set up Internet diamond auctions, including a recent article in the International Herald Tribune. Rapaport has set up the auctions to generate an “index” that will eventually be used to set prices for an exchange that will trade diamond futures.

Charles Wyndham, another Internet commentator, also wants a diamond futures market. Some of the leading industry banks also seem interested in the concept, because they see it as a way to get more investment in the industry.

Yet so far the results don’t seem too encouraging. T Rapaport’s first auction of 210 lots was disappointing.” only 27 stones were sold .

This is similar to what happened with the Diamond Circle Capital Fund. The investors behind this planned a $140 million IPO for a fund made up of larger, better stones. Yet they withdraw the fund for lack of interest. It is unclear when it will reappear on the market.

Of course, all this is early days, and the auctions could turn out to be more than they are. This was just the first experience. Mr. Rapaport is a very determined man, and he may be able to iron out some of the kinks in the auction.

We have no problem with selling diamonds via auction, Christies and Sotheby’s have been doing for years. Our objection is to the entire concept, particularly Rapaport’s and Wyndham’s plan to sell diamond futures.

We are not sure how any diamond futures plan will help the industry or the investor. These plans are misguided because they don’t understand what the diamond market is about and why companies like ours have devoted our lives to diamonds.

On our desk for many years, we had a sign, given to us by the De Beers Diamond Promotion Service at a Carat Club meeting: “Diamonds. Each as unique as your love.”

That is a wonderful illustration of why people like diamonds. Diamonds are created by nature, and each one is different. Just like every person is a unique, and every relationship is unique.

It is this that makes them valuable. When you reduce them to numbers, you take that away. If we view them as just a commodity that can be traded like pork bellies, then we might as well sell synthetic diamonds created by a machine in Florida.

Moreover, this new mechanism is not necessarily fair for the investor. These speculators will be gambling on whether the price of diamonds will go up and down — but is it fair for them to be competing against diamond traders, who have devoted their lives to studying the stones? And why would a trader want to bet against the price of diamonds when he has so many in his stock? It’s like he is betting against himself. That is essentially what doomed the plan for diamond futures thirty years ago, when it was tried then.
In addition, the Rapaport mechanism attempts to set a price for stones. But what sets diamond prices? The Rapaport list. Diamonds are still not an ordinary market.

There are other risks as well. In a press release on diamond futures, the International Diamond Manufacturers Association wrote that they “expressed grave concerns regarding the risks to the industry resulting from the anticipated volatility which will be interjected into an otherwise reasonably stable marketplace.”

It is ironic that this new plan to determine a “value” for diamonds may rob them of the very thing that makes them valuable. 

Related Articles

Royal jewelry from Princess Margaret up for auction
Blog Archive

Royal jewelry from Princess Margaret up for auction

The eternal diamond versus lab-grown
Blog Archive

The eternal diamond versus lab-grown

White gold favorite for women buying jewelry
Blog Archive

White gold favorite for women buying jewelry